Problem 2: A/R (5 Points)

Larsen Distributing was having cash flow problems prior to New Years, to help improve their cash flow situation, they pledged $ 500,000 of Accounts Receivable as collateral against a $ 500,000 loan from First Security Bank on January 1, 2020. The loan terms require an upfront 1% finance charge to be deducted from the loan proceeds and interest on the outstanding loan balance at 9% per year. During the first month of January, Larsen collected $350,000 cash on the assigned accounts receivable. This amount, plus one month's interest was paid on January 31st, per the loan agreement.

Instructions: Make all the entries for Larsen, related to this loan arrangement for the month of January 2020.